An investment project has a positive net present value (NPV) of $7,222 when its cash flows are discounted at the cost of capital of 10% per annum. Net cash inflows from the project are expected to be $18,000 per annum for five years. The cumulative discount (annuity) factor for five years at 10% is 3.791.What is the investment at the start of the project?
A、$61,016
B、$68,238
C、$75,460
D、$82,778
A、$61,016
B、$68,238
C、$75,460
D、$82,778
【参考答案及解析】
Let x = investment at start of project. Year Cash flow Discount factor Present value $ 10% $ 0 x 1.000 (x) 1-5 18,000 3.791 68,238 7,222 -x = $68,238 - $7,222 x=$68,238-47,222 x = $61,016
Let x = investment at start of project. Year Cash flow Discount factor Present value $ 10% $ 0 x 1.000 (x) 1-5 18,000 3.791 68,238 7,222 -x = $68,238 - $7,222 x=$68,238-47,222 x = $61,016